Expect Major Changes in the Mobile Landscape Imminently

We are heading into E3 with Apple (AAPL) firmly in the driving seat when it comes to mobile gaming. Their iPhone and App Store combination has been one of the biggest and fastest events ever in the history of video gaming. Very rapidly they have built themselves an entrenched position that you may think puts them a long way ahead of the competition. But maybe not.

Apple have a business plan of only using one airtime provider per territory. This has been fundamental to how they make money out of iPhone. However it is very limiting. So expect Apple to bring out new, different, iPhones with different features and benefits that can be sold through a different airtime provider in each territory. They need to do this to expand their user base.

Another area that Apple need to address is netbooks. These are taking the world by storm and Apple are being left out. Apple have two possible answers to the market need. They can make a very small MacBook. They have done this to an extent with the new 13 inch model but it is three times the price it needs to be in order to compete. The second answer is to make a big iPhone / iPod, something tablet sized that uses touch screen and has the functionality of an Atom netbook. This is very strongly rumoured to be imminent.

Of course, Microsoft (MSFT) want to change this situation and the combination of Zune and Xbox Live will be their weapon of choice. Everyone is getting very excited about a couple of Tweets that have emerged recently from Microsoft. “June 2009 will be an important month for Zune lovers.” and “New product launch, that’s all I’m allowed to say. Hold off from buying an iPhone/Pre.” I bet that has got you excited. It would be extremely foolish to underestimate Microsoft who traditionally win in new markets they enter after an initial slow start. So I think this new Zune really could be very special indeed.

But the big threat to Apple does not appear to be coming from Microsoft at the moment, it is coming from Google (GOOG). In Android, Google have created their best product yet in that integrates all their other products and a whole lot more in your pocket. And because Android handsets are manufactured by third parties and sold by third parties, they are not blighted by Google’s abysmal lack of marketing culture. Expect a flood of Android handsets from a wide range of manufacturers, it will take a lot to stop them dominating the market. And just as with Apple there is the potential to build a netbook beater, all they need to do is increase the form factor. Such a device will be a lot cheaper than the Apple equivalent and on current performance it will be a lot better too. It is coming.

This whole product area could have been owned by Sony (SNE). They were uniquely positioned to exploit it with a rich background in mobile video games, MP3 players and mobile phones. Yet they screwed up with their different corporate divisions not talking to each other. And still they seem to have lost the plot. The new Sony X series Walkman has some nice features but it completely misses the target. If the new PSP is not a phone then Sony might as well give up.

Finally we have Nokia (NOK) and Nintendo (NTDOY.PK). Two massive players who seem to be peripheral to what is happening out there. They are both too big and too successful to see this whole market pass them by. So they both need to come up with big announcements soon.

The whole pocket device landscape is in extreme flux. It will be massively different three months from now and even more different six months from now.

Comments

[HereAndNow:]

I think netbook/tablet devices running a smartphone OS like Android, could become a big hit with mobile operators.

If these devices include smartphone hardware (touchscreen, 3G, GPS, accelerometer, compass, etc.) and support cell phone calls and SMS, the mobile operators would be able to generate revenue from:
1. data contracts.
2. phone calls & SMS.
3. a cut of the revenue from Android Market app purchases.
4. any value-added services they offer that exploit the smartphone nature of these devices.

They don't have all of these same advantages, when the devices are running a desktop OS.

May 13 07:27 AM

[iJah420:]

“June 2009 will be an important month for Zune lovers.” and “New product launch, that’s all I’m allowed to say. Hold off from buying an iPhone/Pre.”

This RUMOR... has been debunked.

TOTAL BS. google Zune phone rumor

gizmodo.com/5250882/zo...

More vaporware and wishful thinking... MSFT is NOT in a good position in the mobile space.

Sell MSFT Buy AAPL better long term INVESTMENT... Yes INVESTMENT.

As far as netbooks... Apple has the answer. APPLE DOES NOT RUSH PRODUCT TO MARKET!!! please remember MP3 players were out long before Apple rained on their collective parades. History has proved Apple to be an innovator not a ME TOO!

May 13 08:40 AM

[iJah420:]

Android in the mobile space is what Linux is to the desktop.
Cool stuff but WAY too many tentacles with no direction and standards xross hardware and software. This is FACT.

All the BIG PLAYERS want to CONTROL open source.

Talk about a contradiction.

Apple has what the others players only WISHED they had.... a tightly knit, integrated ecosystem built from the ground up on one of the best, most sophisticated operating systems on the globe. UNIX... Certified UNIX to be exact.

At this point NO amount of $$$$$$$ can buy what Apple has @ the present time. The other players have their work cut out for them.

May 13 08:53 AM

[Zobby:]

Zune and the statement "I bet that has got you excited"

As the joke goes "all the people who have the current Zunes, all 12 of them are excited".

Really the Zune is barely breathing and on life support. In the January quarter sales down by 54%. Zune has lost millions for Microsoft.

---
The division that Zune belongs to Msfts Entertainment and Devices
Division made a paltry of 426 million for the entire 2008 fiscal year.

Gamesindustry:

"Microsoft released its Q4 and FY 2008 earnings reports today, with the Entertainment and Devices Division reporting a USD 426 million profit over the year."

Note that E&D contains Zune, Xbox, all the Msft. devices like keyboards and mice, All Windows Mobile licenses, and many other
things. And this division one of only five divisions in Msft. made a miserly 400+ million in one whole year!

PC Advisor in January says that the Zune is heading towards 'Zero Market-share" echoed by the Wall Street Journal: "at its much faster rate of decline, the Zune player looks like it's headed from low to no market share".

Apple execs must really like the Zune, a comparison of the Zune to an iPod Touch must be best PR Apple can have for the superiority of Apple technology.

May 13 10:39 AM

[Jon T:]

I think the writer has to be a processor short of a computer....

Best you can say is that it's quite funny.

May 13 11:44 AM

[iJah420:]

On a bit of a sidetrack to the mobile space... Did it ever occur to the half brained ANALists that Apple has provided it's third party developers with a SDK that allows for extremely rapid development and deployment of mobile applications that rival that of the desktop.

RIM & Palm do not own desktop operating systems.

webOS is just that... a mobile OS.... no matter how u spin it people will still gravitate to a desktop or laptop.....to sync their data and or back it up.

also... will the Pre be Mac compatible? can not find much out here that can clarify this question.

May 13 12:16 PM

[mollytjm:]

i'm still laughing... Zune? you've got to be kidding. the one thing microsoft can never do is quick innovation. it takes them forever to come out with something... the Zune was not just a sleeper, it's been in a coma.
'New' might mean it's improved over the last one... but that wouldn't take much. And it's been the butt of so many jokes...i can't see anyone getting all that excited about it. And i supposed, once again, they'll put it out in brown. sigh.

May 13 12:28 PM